If you have not considered working with your CPA on a year-end tax planning strategy, this is the year you should.
Tax reform is at the top of the list for the President-elect Donald Trump and he will have cooperation of the House and Senate. Therefore we will likely see some quick tax reform affecting 2017 tax situations and thus could have an impact on 2016 tax liabilities.
The reform for 2017 and beyond includes a decrease in the personal (maximum 33%) and business tax (15%) rates, as well as repeal of Obamacare and the related tax. Alternative Minimum Tax is also supposed to go away. Additionally, the president-elect Trump is pushing to get the repatriation of overseas profits by providing a lower tax rate on these dollars coming back to the U.S.
Therefore where are the opportunities? If you are in planning to sell assets or stocks or in the middle of escrow you owe it to you and your family to discuss the tax impact of possibly delaying the close of the sale until 2017 as it could be a huge tax savings and increase in your family’s wealth. Some other considerations to consider are trying to defer income into 2017 as well as accelerating deductions and purchases back into 2016 both personally and in your businesses or real estate ventures. Finally, With his call to slash itemized deductions in the future years, there are opportunities in 2016 that should not be missed.
Additionally, be aware that any partnership/LLC 2016 returns have an earlier due date of March 15th, 2017.
Run to your CPA to discuss the opportunities you, your family and businesses have before the year closes.